UBS Global Financial Services Conference New York, May 9, 2005

Transcription

1 UBS Global Financial Services Conference New York, May 9, 2005 Brady Dougan Chief Executive Officer, Credit Suisse First Boston Member of the Executive Board, Credit Suisse Group

2 DISCLAIMER Cautionary Statement regarding forward-looking information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Forward-looking statements involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in "Risk Factors" in our Annual Report on Form 20-F for the fiscal year ended December 31, 2004 filed with the US Securities and Exchange Commission, and in other public filings and press releases. We do not intend to update these forward-looking statements except as may be required by applicable laws. Slide 1

3 AGENDA 1. FIRST QUARTER 2005 RESULTS 2. STRATEGY IMPLEMENTATION UPDATE Slide 2

4 A STRONG START TO 2005 Solid revenue generation in all segments on the back of improved market conditions Net income of CHF 1.9 bn Doubled from 4Q04 and up 3% from 1Q04 Return on equity of 20.6% for the Group, at the top end of target range Banking RoE of 22.9% Winterthur RoE of 12.0% Net new assets at Private Banking of CHF 7.0 bn with an annualized growth rate of 5.2% Share repurchase of up to CHF 6 bn approved at shareholders meeting Slide 3

5 PERFORMANCE GOALS OVERVIEW all goals on full-year basis 1Q05 Mediumterm goals Credit Suisse Private Banking Gross margin 138 bp 130 bp Cost/income ratio 55 % < 55 % Net new asset growth (annualized) 5.2 % > 5 % Corporate & Revenue growth (annualized) 3 % > 5 % Retail Banking Cost/income ratio 62 % < 60 % Return on allocated capital 22 % > 15 % Credit Suisse First Boston Winterthur Division Pre-tax margin 1) 20.5 % > 20 % Return on allocated capital 23.0 % > 20 % Division IFS rating A1 / A- / A+ 2) Single A Return on equity 12.0 % > 12 % Non-Life Combined ratio 99.4 % < 98 % Life & Pensions Expense ratio 6.3 % < 8 % Credit Suisse Group Consolidated Return on equity 20.6 % 15 % to 20 % Tier 1 target 12.1 % > 10 % 1) Excluding minority interest results relating to the FIN 46R consolidation 2) For Moody s, Standard & Poor s and Fitch Ratings Slide 4

6 CREDIT SUISSE FIRST BOSTON SEGMENT NET INCOME in CHF m Institutional Securities net income Wealth & Asset Management net income in CHF m ) ) -13% +101% -1% % 1Q04 2Q04 3Q04 4Q04 1Q05 1Q04 2Q04 3Q04 4Q04 1Q05 1) Including the release of tax contingency accruals of CHF 27 m and CHF 126 m in 2Q04 and 3Q04, respectively Slide 5

7 INSTITUTIONAL SECURITIES FIXED INCOME & EQUITY TRADING REVENUES Fixed income trading revenues in CHF m Equity trading revenues in CHF m 1,105 1,869 1,348 1,278 1, , % +12% +3% -16% 1Q04 2Q04 3Q04 4Q04 1Q05 1Q04 2Q04 3Q04 4Q04 1Q05 Slide 6

8 INSTITUTIONAL SECURITIES INVESTMENT BANKING REVENUES Investment banking revenues in CHF m % Total -15% +1% Advisory and other fees Debt underwriting -31% 1Q04 2Q04 3Q04 4Q04 1Q05 Equity underwriting Slide 7

9 INSTITUTIONAL SECURITIES EXPENSES AND PRE-TAX MARGIN Total operating expenses in CHF bn Pre-tax margin 1) in % Other expenses Compensation and benefits % % 4.6 1Q04 2Q04 3Q04 4Q04 1Q05 1Q04 2Q04 3Q04 4Q04 1Q05 1) Excluding minority interest results relating to the FIN 46R consolidation Slide 8

10 NUMEROUS HIGH PROFILE TRANSACTIONS IN 1Q05 Advised on five of the top ten global M&A deals announced Ranked #6 in global announced M&A Ranked #2 in global IPOs and #1 in European IPOs Led several prominent high yield transactions Notable transactions include: M&A Equities Fixed income $21,800,000,000 Sale to SBC Communications Inc. $1,600,000,000 IPO $2,550,000,000 High Yield Bonds January 2005 Advisor February 2005 Joint Bookrunner January 2005 Joint Bookrunner $17,000,000,000 Acquisition of The May Department Stores Co. $1,600,000,000 IPO $2,540,000,000 Senior Credit Facilities March 2005 Advisor February 2005 Joint Bookrunner January 2005 Joint Lead Arranger March 2005 $11,300,000,000 Sale to Private Equity Consortium Advisor March 2005 $1,200,000,000 IPO Joint Global Coordinator and Joint Bookrunner January 2005 $1,300,000,000 5 Year and 10 Year Notes Joint Bookrunner Slide 9

11 NOTABLE KEY HIRES Name Michael Philipp Phil Ryan Vikram Ghandi Gary Neuser Lito Camacho Kaoru Koyano Title CEO Europe Chairman of Global Financial Institutions Global Head of Financial Institutions Head of PCS Vice Chairman Singapore Head of M&A Japan Slide 10

12 AGENDA 1. FIRST QUARTER 2005 RESULTS 2. STRATEGY IMPLEMENTATION UPDATE Slide 11

13 RECAPPING CSFB S STRATEGY Credit Suisse First Boston will win where we choose to compete by delivering a more focused franchise built around: Client segmentation Focus on high margin / strategic products Expanded / disciplined risk taking Improved execution & Group integration Enhanced ownership culture Slide 12

14 METICULOUS EXECUTION IS THE HIGHEST PRIORITY Strategy implementation governance Senior management oversight Business accountability CSFB Executive Board Review Committee chaired by CEO Divisional / Regional heads Monthly reporting Regular / Rotating division meetings Dedicated measurement / tracking Program office Financial reporting / performance mgmt Slide 13

15 PRIORITY ACTION STEPS CROSS-DIVISIONAL Create Firm-wide structuring group Formed unified group across Fixed income, Equities and Corporate & investment banking bringing together 200 people from 12 different groups Made key hires and expanded capabilities Increased revenues without raising expenses Form unified proprietary trading group Created integrated trading platform across Fixed income and Equities Appointed regional heads for Europe and Asia Added new businesses and increased headcount by 20% Started to increase market risk taking, in a disciplined way to take advantage of core skills Slide 14

16 PRIORITY ACTION STEPS FIXED INCOME (1/2) Grow mortgage securities business Expanded mortgage trading capabilities Increased wholesale origination volume and added over 340 wholesale brokers Signed option agreement to purchase sub-prime mortgage servicer Establish commodities business Made several key hires, including Heads of Natural Gas and Northeast Power Trading, Head Strategist Progressing with infrastructure and systems development Initiated trading; expect significant ramp-up over the next few months Expand presence in emerging markets, especially Asia Significantly increased coverage resources Slide 15

17 PRIORITY ACTION STEPS FIXED INCOME (2/2) Build-out Leveraged Finance and CMBS capability in Europe Leveraged Finance Several key hires new Co-head of Distressed bank debt; new Managing Director in High-yield capital markets; four new research analysts German special finance relocated new head of group from New York 1Q05 revenue up 70% versus 1Q04 CMBS Hired origination team and established presence in UK, Germany, and France Priced largest ever Sterling CMBS tranche in April 2005 Broaden capital commitments Extended capital to support high-growth businesses Average VaR scaled up moderately Slide 16

18 PRIORITY ACTION STEPS EQUITIES Streamline cash equities Reduced headcount in equity sales Completed client account review to deliver a tiered service according to client needs Focus research on priority clients and sectors Reduced headcount in equity sales Completed client account review to deliver a tiered service according to client needs Build-out automated execution capability Completed technology upgrade Introduced new product Order flow up 50% versus last year Slide 17

19 PRIORITY INITIATIVES CORPORATE & INVESTMENT BANKING M&A and strategic advisory Global leadership team in place with a deep bench of experienced bankers Strong momentum advising on landmark transactions across multiple industries Continued fee discipline Financing Created Global Market Solutions Group providing value-added funding and financing solutions to clients from a broad-based multi-product platform Co-located capital markets, leveraged finance origination and structuring teams to leverage innovation across all products including derivatives Client coverage Implemented global account planning process to focus groups and bankers on the most profitable industry and client opportunities Increased accountability with revenue and calling targets for every account Slide 18

20 PRIORITY INITIATIVES WEALTH & ASSET MANAGEMENT Alternative capital Spin out funds and expand internally Spin out three large funds first spin out completed in April Refocused private equity to avoid conflicts while retaining top talent Exploring PE opportunities in Asia; introducing new CDO products; launching registered hedge fund of funds; building LP services platform Streamline CSAM in US and Asia Achieved 80% of expense reduction target in US Consolidating Japan business in into one legal entity Appoint new PCS business head and grow advisor force Hired new CEO in March Aggressively recruiting new advisors Slide 19

21 ONE BANK INTEGRATION OBJECTIVES Slide 20

22 ONE BANK INTEGRATION TIMETABLE & STATUS UPDATE Item Project set-up and definition of model Legal entity merger Bank integration 26 integration workstreams (front office and support) 100 project team members Integrated businesses operational and new reporting structure in place Status / Target Date Completed Merged entity operational as of May 16, 2005 Ongoing January 1, 2006 Slide 21

23 SUMMARY Solid 1Q05 results and several high profile deals Implementation of CSFB strategy on track One Bank implementation underway, design to be completed shortly Full benefits of strategy implementation and integration will take time Huge value creation opportunity Slide 22

24 QUESTIONS & ANSWERS Slide 23